If you’re buying a home, you might be wondering if there will always be a lien on your property. Short answer: not necessarily, but liens are common, especially when a lender or contractor is involved. A lien is basically a legal hold that someone—like a lender, the government, or a contractor—places on your property to make sure they get paid if you owe them money.
Think of it as a safety net for creditors. They’re saying, “If you don’t pay up, I have a legal right to claim this property.” While the idea might sound intense, a lien is a standard part of property ownership, especially with a mortgage. Once a lien is paid off (like when you finish paying your mortgage), it’s removed, leaving you with a clear title.
Will my property always have a lien?
No, not always. Here’s how it usually works:
- If you have a mortgage: Your lender puts a lien on your home as collateral. It stays there until the mortgage is fully paid off.
- If you don’t have any debts tied to the property: After your mortgage or any other debts are paid off, the lien is removed, leaving you with a “clear title.” This means you own the property free and clear, and no one else has a legal claim on it.
- If there are unpaid obligations (like taxes or HOA fees): Unpaid debts tied to the property, such as overdue taxes or HOA fees, can result in liens. These liens need to be settled before you can sell or refinance.
Having a lien isn’t necessarily a bad thing; it’s more about understanding who has a claim on the property at any given time. Let’s break down the main types of liens you might come across and what they mean for you as a homeowner.
Frequent liens you could encounter
Mortgage Lien: This is the standard one—your lender puts a lien on your home as collateral for the mortgage. If you default, they can foreclose and take the house.
Tax Lien: If you skip out on property or income taxes, the government steps in with a tax lien. They can force you to sell the property if it’s not resolved.
Mechanic’s Lien: Had work done on your house? If you didn’t pay the contractor, they can slap a lien on your property to ensure they get paid before you can sell.
Judgment Lien: Lose a lawsuit and owe money? The court can issue a judgment lien, meaning the winner of the case can go after your property if you don’t pay up.
Is it normal to have a lien on your house from your lender?
Totally normal, and nothing to worry about. When you get a mortgage, the lender puts a lien on your house as collateral. It’s their insurance policy—they want first dibs on the property if you stop making payments. Once you pay off the mortgage, the lien is removed, and then, finally, the house is yours outright.
How to figure out if a lien is legit
Sometimes, a lien shows up that shouldn’t be there (or it’s way too high). Here’s what to do if you think there’s an issue:
- Review the lien: Start by double-checking that it’s legit. Look at the amount and see if it was filed correctly.
- Dispute it: If it’s inaccurate, try negotiating with the lienholder. You can send a demand for a lien release if you think it’s bogus.
- Take it to court if needed: If the lienholder won’t budge, you might have to file a “quiet title” lawsuit. This gets the courts involved to decide if the lien should stick.
Heads-up: lien rules change by state
Lien laws vary by state, especially for mechanic’s liens. For example:
| State | Filing deadline | Notice requirement | dispute resolution |
|---|---|---|---|
| California | 90 days after work completion | 20-day preliminary notice | file a “release bond” to temporarily remove lien |
| Texas | 15th day of the 3rd month | notice of intent to file lien required | file a lawsuit to contest or release bond |
| Florida | 90 days after work completion | notice to owner within 45 days of start | file a notice of contest, lienholder must act in 60 days |
| Colorado | 4 months after work completion | 10-day notice of intent required | file a petition to remove the lien |
What is a lien search, and should I get one before buying a home?
A lien search is part of a title search to ensure no unresolved liens are on the property. Any existing liens could become your responsibility after purchase.
Can I buy a house with a lien on it?
Yes, but the lien will need to be resolved before or during closing. The seller typically pays off the lien from sale proceeds, but it’s crucial to negotiate this during the sale.
Do liens expire or go away after a certain time?
Liens have expiration dates, varying by state and lien type. A mechanic’s lien might expire if no legal action is taken, while tax liens can last longer.
Voluntary vs. involuntary lien—what’s the difference?
A voluntary lien, like a mortgage, is agreed upon by the homeowner. An involuntary lien, like a tax or mechanic’s lien, is placed without consent due to unpaid debts.
If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.